EUR/USD Technical Analysis: Short Position Back in Play
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- EUR/USD Technical Strategy: Short at 1.0926
- Euro stalls at familiar resistance below 1.10 figure vs. US Dollar once again
- Short position triggered, looking for another rejection at falling channel top
The Euro has stalled at familiar falling channel top resistance capping attempts at building upside momentum against the US Dollar since early December 2015. The anti-risk currency has failed to mount a sustained upside push even amid heavy risk aversion since the beginning of the year.
Near-term support is at 1.0778, the January low, with a break below that on a daily closing basis opening the door for a test of the 1.0694-1.0711 area marked by the falling channel floor and the January 5 bottom. Alternatively, a push above the 38.2% Fibonacci retracement at 1.0974 paves the way for a challenge of the 50% level at 1.1115.
Risk/reward considerations looked attractive to attempt another short position in line with our 2016 fundamental outlook and we have sold the pair at 1.0926, initially targeting 1.0829. A stop-loss will be activated on a daily close above 1.0974. We will book profit on half of the position and trail the stop-loss to the breakeven level once the first objective is reached.
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